Point Roberts, South Salem, New York- April 22, 2009- Investorideas.com and its leading green investor portal, Renewableenergystocks.com announce the second edition of the new solar innovation series within "Renewable and Solar Energy Perspectives" with J. Peter Lynch. Just in time for Earth Day, Mr. Lynch tells solar investors and consumers what they want to hear about solar innovation.

The second in our "Solar Innovation Series" is a creative financial innovation that could sweep the nation and literally make SOLAR ENERGY for all practical purposes FREE to the average homeowner. It does NOT need a string of technical breakthroughs or new scientific discoveries all it needed is a little bit of financial innovation – simple as that.

If making money by investing in energy efficiency improvements and solar systems for our homes is so obviously needed and is also a good investment. Why do so few of us move forward and do it?

Well, that answer is very simple. It cost too much since ALL the payment is UP FRONT. Think about it, if we all had to buy our homes and cars with CASH up front how many of us would do it? Buying power from your local electric utility is a simple, pay-as-you-go service. Solar, on the other hand, requires tens of thousands of dollars up front and a long-term commitment to see a return on investment.

How about making SOLAR, pay-as-you-go-too? What if you could get some benefits right away and also not have to pay for 20+ years of power up front? Well, the City of Berkeley, California is now pioneering what many experts believe may be just such a solution: Berkeley FIRST. Berkeley launched the program in November 2008. The initial pool of funding was made available to property owners and sold out in less than ten minutes.

Berkeley pays the upfront costs through the issuance of a municipal bond. The bonds are repaid from participating property owners' property tax bills over 20 years. Participating property owners pay for only the costs of their energy project and property tax expenses remain unchanged for those residents who choose not to participate.

The result is that solar and energy efficiency projects are paid for over a long period of time (like your home or your car), in bi-annual installments. The interest rate is fixed. Property owners do not need to access their own capital or credit. And if the owner sells the property, the repayment obligation transfers along with the property itself.

How did this come about?

Berkeley FIRST is simply a new twist on a common method of financing improvements in communities (Mello-Roos Community Facilities Act of 1982). California, like most states, has long provided cities and counties with the power to pay for certain projects such as sewers, parks, and the undergrounding of utilities by passing the cost directly on to the property owners that directly benefit from the project.

Historical Background

In 1978 Californians enacted Proposition 13, which limited the ability of local public agencies to increase property taxes based on a property’s assessed value. In 1982, the Mello-Roos Community Facilities Act was created to provide an alternate method of financing needed improvements and services. To do this, the city creates a "land-secured" financing district that includes the properties that would receive a benefit from the project. It then sells bonds to cover project costs and the property owners who receive a benefit who pay back the costs through an addition to their property tax bill.

Program Details – Straight Forward and Simple

The Berkeley FIRST program is entirely voluntary. You only pay additional property taxes for the cost of your individual project, no other taxpayers taxes are affected.

The City has a private financial partner to handle the financing and bond purchase for the numerous small projects instead of the usual one large expensive project.

Residents apply to the program online through a dedicated Berkeley FIRST website. Assuming they are not late on taxes or in foreclosure, each applicant receives a reservation for funding. They have nine months to install their solar system and return to the website to request payment.

After signing forms and providing documentation, a check is issued to the property owner. A tax lien is placed on the property and a small bond is sold to provide the funding necessary to pay for the project.

Typical Installation Numbers

To illustrate this innovation clearly I decided to put some numbers to an actual example so that you can see the actual cash flows and how it is, in reality, FREE.

Illustration Installation Assumptions:

3 kilowatt residential system (3 KW)

Cost: $19,500 , after all California grants plus an city administration fee

Annual Financing Payment: $2,000 for 20 years added to property taxes

Annual Savings: $640 first year, escalated at 5% per year

Other benefits and costs: federal 30% tax credit in first year and equipment (inverter) replacement cost ($1,200) in year 12.

Annual

Tax Savings

Net

Federal

After tax

Cummulative

Annual Savings

Finance Cost

on Loan

Cost

Tax Credit

Cash Flow

Cash Flow

640.00

2000.00

570.00

1430

5,850

4420.00

4420.00

672.00

2000.00

579.00

1430.00

-758.00

3662.00

705.60

2000.00

570.00

1430.00

-724.40

2937.60

740.88

2000.00

570.00

1430.00

-689.12

2248.48

777.92

2000.00

570.00

1430.00

-652.08

1596.40

816.82

2000.00

570.00

1430.00

-613.18

983.22

857.66

2000.00

570.00

1430.00

-572.34

410.89

900.54

2000.00

570.00

1430.00

-529.46

-118.57

945.57

2000.00

570.00

1430.00

-484.43

-603.00

992.85

2000.00

570.00

1430.00

-437.15

-1040.15

1042.49

2000.00

570.00

1430.00

-387.51

-1427.66

1094.62

2000.00

570.00

1430.00

-1200

-1535.38

-2963.04

1149.35

2000.00

570.00

1430.00

-280.65

-3243.69

1206.82

2000.00

570.00

1430.00

-223.18

-3466.88

1267.16

2000.00

570.00

1430.00

-162.84

-3629.72

1330.51

2000.00

570.00

1430.00

-99.49

-3729.21

1397.04

2000.00

570.00

1430.00

-32.96

-3762.17

1466.89

2000.00

570.00

1430.00

36.89

-3725.27

1540.24

2000.00

570.00

1430.00

110.24

-3615.04

1617.25

2000.00

570.00

1430.00

187.25

-3427.79

1698.11

1698.11

-1729.68

1783.02

1783.02

53.34

1872.17

1872.17

1925.50

1965.78

1965.78

3891.28

2064.06

2064.06

5955.34

Average Cost per month = $12.32 over first 20 yearsAverage Benefit per month = $26.77 over first 25 years

Average Increase in home value = $ 21,154.00 or $88.15 per month over first 20 yearsNote: This 20 to 1 ratio is based on annual energy savings was estimated by the Appraisal Journal in 1998 and is cited by Wells Fargo Bank.

As you can see from the example the system for all practical purposes is "free". In fact, the actual cash flow is positive until roughly year 7, but the actual value added to the house increases from the first year and each subsequent year as the saving increase. So once a system has been put in place the homeowner is basically getting "free" solar energy, helping the planet, setting a great example for their kids and increasing the value of their primary asset all at the same time.

Berkeley was FIRST, but other communities and cities in CA are following their lead. San Francisco and San Diego are putting in place much bigger programs. I feel that once people realize the actual numbers involved it could literally sweep the country. UC Berkeley did a study that projected that if this program was rolled out nationwide it would create up to $280 Billion in renewable energy and energy efficiency investment into our economy and dramatically reduce CO2 exactly when our nation needs to stimulate the economy and reduce our carbon footprint.

Have a SUNNY Earth Day!

Mr. Lynch has worked, for 31 years as an independent analyst and investor in small emerging technology companies. He has been actively involved in following developments in the renewable energy sector since 1977 and is regarded as an expert in this field. He was the contributing editor for the past 17 years to the Photovoltaic Insider Report, the leading publication in Photovoltaics industry that was directed at industrial subscribers, such as major energy companies, utilities and governments around the world. He can be reached via e-mail at: solarjpl@aol.com or at his new website: www.sunseries.net.

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